FINANCIAL MARKETS AND SPECIALISED INSTITUTIONS DECEMBER 2022 PAST PAPER

WEDNESDAY: 7 December 2022. Afternoon Paper. Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.

QUESTION ONE

1. Explain FIVE roles of financial markets in a developing country. (5 marks)

2. Highlight FIVE distinctions between money markets and capital markets. (5 marks)

3. Assess the roles of FIVE financial regulators in the financial eco-system of your country. (10 marks)

(Total: 20 marks)

QUESTION TWO

The securities market provides a platform to link lenders, borrowers and productive sectors of the economy. In the context of financial markets:

1. Highlight FIVE characteristics of a securities market. (5 marks)

2. Explain FIVE instruments for raising capital in the securities market. (5 marks)

3. Examine FIVE functions of a securities market. (10 marks)

(Total: 20 marks)

QUESTION THREE

1. Outline FIVE strategies of minimising insider trading. (5 marks)

2. Describe FIVE advantages of automated trading systems (ATS) in financial markets. (5 marks)

3. Assess FIVE players that drive the development of the capital markets in your country. (10 marks)

(Total: 20 marks)

QUESTION FOUR

1. Financial markets and other specialised institutions play a prominent role in many economies. Governments around the globe have therefore deemed it necessary to regulate certain aspects of these markets and institutions.

With reference to the above statement, explain FIVE forms of government regulations on financial markets and specialised institutions in your country. (5 marks)

2. Explain FIVE functions undertaken by investment banks which are distinct from those of securities brokerage firms in the securities market. (5 marks)

3.  Describe FIVE duties imposed by law on the trustees of a pension scheme. (10 marks)

(Total: 20 marks)

QUESTION FIVE

1.  Identify FIVE methods that could be adopted by a country to deal with money laundering. (5 marks)

2. Explain FIVE arguments in support of offshore banking. (5 marks)

3. Examine FIVE functions of the Central Depository and Settlement Corporation (CDSC) or a similar institution in your country. (10 marks)

(Total: 20 marks)

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